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Investing.com -- Shares of Stillfront Group AB (STO:SF) tumbled 8% today following the company’s release of its first-quarter results, which showed a significant decline in organic revenue growth. The game developer reported a 12% drop in organic revenue for the first quarter of 2025, falling short of the consensus estimate, which had predicted an 8% decrease.
The company’s net revenue for the first quarter came in 5% below the consensus expectations and 2% under Barclays (LON:BARC)’ forecast. According to the report, the declines were most pronounced in the North American and European markets, where organic revenue fell by 21% and 14%, respectively. Conversely, the MENA & APAC regions experienced a modest growth of 2%.
Adjusted EBITDAC for the first quarter was in line with Barclays’ projections but fell 4% short of the broader consensus, with margins matching expectations. The outlook for the remainder of 2025 suggests a continued struggle for Stillfront. Management had previously hinted at an improvement in organic growth throughout the year, citing easier comparisons and upcoming product launches.
However, they now caution that the second quarter will likely remain challenging due to tough comparables in Europe and adjustments in North America.
Stillfront’s management remains optimistic about the second half of the year, anticipating a return to neutral or positive organic growth, propelled by new game releases and more favorable comparisons.
Despite this, if the second quarter experiences a high single-digit rate decline and the second half only sees slightly positive growth, the full-year organic net revenue growth for 2025 could be around -4.5% to -5.0%. This projection is more pessimistic than Barclays’ estimate of -3.5% and the Modular Finance consensus of -2%.
In response to the results, Barclays commented, "Overall, the weaker start to 2025 and the commentary on Q2 logically point to weaker FY25 group organic net revenue growth, but they were not specific on this previously or now."
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